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After months of watching yields on bonds of all stripes move lower in lockstep, the past week was a reminder that bond markets are, in fact, an eclectic bunch and often behave quite differently from one another, as they should.

Yields on Treasuries, the bond-market backbone, continued their long-term grind toward zero, fueled by some new concerns piled atop a lot of old ones. Along with the now-standard mix of sluggish economic growth and Europe-related worries, investors face weeks of uncertainty ahead of the fiscal cliff plus an escalating military crisis in the Middle East. Ten-year Treasury yields fell to 1.581% from 1.615% a week ago, and the 30-year yield fell to 2.734% from 2.749%.

Muni bonds held steady, bolstered by their safe-haven status and fears that the fiscal cliff will bring higher tax rates. That would make tax-exempt munis more valuable, except that Congress could challenge that exemption in the federal government's effort to raise revenue.

On the other end of the spectrum, corporate bonds slumped, with high-yield bonds experiencing their second-largest downturn this year. Junk-bond yields are priced off of underlying Treasury yields, but the sector is essentially the bond market's proxy for equities. Hence in a week when Treasury yields fell, junk bonds took their cues from the selloff in stocks, and their yields, which move in the opposite direction of price, rose. The average junk bond now yields 6.74%, up from 6.2% less than a month ago.

The reality is that bonds—be they ultra-safe Treasuries and munis or riskier corporate bonds—remain expensive. The average junk-bond price is down two cents on the dollar in the past month but it's still above par value at 102.25 cents. Perpetual premium prices make buyers more susceptible to occasional losses and corrections.

Still, long-term technical pressures, namely the Fed-sanctioned stampede into riskier assets, point in the favor of risky bonds. And unlike equities, bonds offer a better built-in floor under any selloffs. Unless a company defaults, you're still going to get back 100 cents on the dollar when your bond matures, despite interim swings in broader market sentiment.

"THERE'S NO BUBBLE IN BONDS," says Andrew Feltus, portfolio manager at Pioneer Investments. "You're not in a position where you could lose all of your money. The Fed is just making it so that you can overpay."

Feltus is avoiding Treasuries, which offer negligible income and inadequate protection against inflation or an eventual rise in rates. High-yield bonds look better by comparison, and better than they did a few weeks ago, but you shouldn't take too much credit risk.

"I like to find companies I can live with," Feltus says. "I'll take a lower yield in exchange for owning a company that I don't have to worry about."

While this latest flight from risk makes Treasuries look even more expensive and junk bonds look vulnerable, selloffs bring buying opportunities. One may have emerged in the form of closed-end funds, which also broadly sold off last week. Such funds issue a fixed amount of shares, linking their value not only to the underlying asset but also to the share price, which may trade at a premium or a discount to net asset value based on current sentiment. Right now, you're seeing a lot of discounts on fixed-income closed-end funds.

"Most funds in our universe are now trading cheaper than their 52-week average valuations," wrote UBS analyst Sangeeta Marfatia on Friday. "We believe that as valuations get to double-digit discounts, buyers will return to the group in search of yield."